Leggett & Platt, Incorporated engages in the design and production of a range of engineered components and products worldwide. It operates in five segments: Residential Furnishings, Commercial Fixturing & Components, Aluminum Products, Industrial Materials, and Specialized Products. Residential Furnishings segment offers bedding products, furniture and consumer products, and fabric, foam, and fiber to manufacturers of finished bedding products and upholstered furniture, as well as to retailers and distributors. Commercial Fixturing & Components segment provides fixture and display products, and office furniture components to retail chains and specialty shops; brand name marketers and manufacturers, food service companies, healthcare providers, and restaurants; and office, institutional, and commercial furniture manufacturers. Aluminum Products segment produces non-automotive aluminum die castings, and zinc and magnesium die castings, as well as new and refurbished dies for various types and sizes of die casting machines. Its customers include small engine and diesel engine builders; manufacturers of outdoor lighting fixtures, cable line amplifiers, wireless communications systems, and other cable and telecommunication products; gas barbeque grill manufacturers; and consumer appliance and power tool manufacturers. Industrial Materials segment produces steel rod, drawn wire, and welded steel tubing, as well as specialty wire products and fabricated tube components. Specialized Products segment supplies lumbar systems and wire components for automotive seating manufacturers; designs, produces, and sells van interiors, including the racks, shelving, and cabinets installed in service vans; and truck bodies for cargo vans, flatbed trucks, service trucks, and dump trucks. This segment also designs and produces machinery for bedding manufacturers. Leggett & Platt was founded in 1883 and is headquartered in Carthage, Missouri.

Discretionary Industry Analysis

WikiWealth.com Industry Description: the consumer discretionary industry refers to products and services bought with discretionary (normal expenses) income. The Consumer discretionary sector encompasses industries that tend to be the most sensitive to economic cycles and stock market swings. Its manufacturing segment includes automotive, household durable goods, textiles & apparel and leisure equipment. The services segment includes hotels, restaurants and other leisure facilities, media production and services and consumer retailing. Read More. Also see the Industry Analysis Home Page.

WikiWealth.com Industry Analysis: During economic recessions, consumers tend to cut back on discretionary expenses to save money during those tough economic times. Less spending by consumers eventually decreases business revenue and stock prices. During economic recoveries, consumers have more discretionary income, so spending quickly increases. Higher spending increases business revenue and eventually increases stock prices. During long economic expansions, discretionary income increase, but at a slower pace than during the initial economic recovery stage.

¹ Investment potential (margin of safety) is a weighted average of the discounted cash flow analysis (DCF), the enterprise value (EV) market multiple analysis, and the Warren Buffett investment analysis. WikiWealth obtains 80% of their quantitative investment potential from fundamental investment analysis.
² The weighted average cost of capital (WACC) analysis for the industry is a broad representation of the WACC for each individual company. A sub-industry WACC analysis offers both stability and accuracy for each individual company.

WikiWealth.com Industry Profit Analysis: The best way to profit from discretionary stock investments is to find the most undervalued investments (Wall Street and Main Street buy ratings) during economic recessions. Those investments should be undervalued (see Wall Street Analysis on left side), and have high Main Street Common Sense investment ratings (see Main Street Analysis on right side). When an economic recovery occurs, discretionary stocks tend to outperform the general stock market, because consumers quickly resume spending on items they wanted, but resisted buying during tougher economic times. Eventually those investments become overvalued, because profits and stock prices increase past their fair values. In other words, the margin of safety becomes low or negative. During the last stages of an economic business cycle, just before a recession, it is best to sell discretionary stocks, because they are likely to decrease in price the fastest. Selling an stock investment is difficult do properly. Expensive (overvalued) stocks with low Main Street Common Sense ratings should be sold at any time to invest in better stocks. Two buys ratings are the best and two sell ratings are the worst possible stock investments. As a general rule, the larger the investment potential (margin of safety), the safer the investment. For more information on stock research ratings click here.

Investment Moats

Investment Moats are fundamental investing theories developed by Warren Buffett and adapted to the SWOT analysis. Investment moats are general characteristics that separate great investments from average stock investments. The wider the investment moat the better. Read more: Investment Moats. For company-specific investment moats: SWOT Analysis.

SWOT Strengths Increase Investor Moats: Below is a list of relevant industry investment characteristics, if any exist

SWOT Weaknesses Decrease Investor Moats: Below is a list of relevant industry investment characteristics, if any exist

Stock Price Triggers

Stock Price Triggers were developed by WikiWealth.com to predict changes in stock price direction, which depend on events outside of the control of the company. In general, if SWOT opportunities are greater than SWOT threats, the stock price should raise; the opposite is also true. For more precise measures, examine each SWOT opportunity and threat, then rank them according to importance and timing. The more important the investment characteristic, the greater the impact on stock direction. The sooner a investment trigger may occur, the more influence it will have on stock price direction. Read more: Stock Price Triggers. For company-specific stock price triggers: SWOT Analysis.

SWOT Opportunities are Positive Stock Price Triggers: Below is a list of relevant industry investment characteristics, if any exist.

SWOT Threats are Negative Stock Price Triggers: Below is a list of relevant industry investment characteristics, if any exist.

Long Company Description (help)

Leggett & Platt (L&P) (NYSE: LEG) is a Fortune 500 diversified manufacturer that conceives, designs and produces a broad variety of engineered components and products that can be found in virtually every home, office, retail store, and automobile. The company serves a broad suite of customers that comprise a "Who's Who" of U.S. manufacturers and retailers. The 125-year-old firm comprises 21 business units, 24,000 employee-partners, and more than 250 facilities located in over 20 countries.

Leggett & Platt is North America's leading independent manufacturer of:

* Components for residential furniture and mattress sets
* Retail store fixtures and point-of-purchase displays
* Components for office furniture
* Drawn steel wire
* Automotive seat support and lumbar systems
* Carpet underlay
* Adjustable beds
* Bedding industry machinery

History

In 1883 in Carthage, Missouri, far removed from any major metropolitan or urban areas, a historical partnership began. J.P. Leggett, an inventor, initiated the partnership because he had developed an innovative bedspring. Mr. Leggett’s bedspring consisted of single cone spring wire coils, formed and interlaced in a unique manner, then mounted on a wood slat base. The bedspring could then be used as a resilient, durable base for the then-popular cotton, feather or horsehair mattresses. Needing expertise in manufacturing and production, he recruited his soon-to-be brother-in-law, C.B. Platt, whose father owned and operated Platt Plow Works, into the partnership. Together, they perfected the equipment necessary to produce the components of their Leggett & Platt bedspring, which was patented in 1885.

The Carthage market for their new product was very limited. To expand the market to a wider region, Mr. Platt and George Leggett, brother of J. P. Leggett, would load a horse-drawn wagon with bedsprings and travel to surrounding communities. Often, to conserve space, they would load the springs and slats separately into the wagon and assemble them in a store or on an adjacent sidewalk. The partnership prospered, and the business was incorporated in 1901.

The company built its first factory and offices in Carthage in 1895. The workforce at that time consisted of the two partners and five employees. Soon after completion of the Carthage plant, a second factory was built in Louisville, Kentucky. During the next 50 years, three more factories were built. Demand for the company’s improved bedsprings was rising, and a second plant was built in Carthage in 1925. The new, much larger plant was located next to a railroad to allow for expanded shipments of products and supplies. In 1942, an additional factory was built in Winchester, Kentucky, which was subsequently consolidated with the Louisville plant. For some time, Texas had proven to be a main market outlet, and in 1947, a major factory was built in Ennis, Texas. By 1947, Leggett & Platt consisted of 4 plants and 500 employees.

Although available in various models and continuously improved upon, bedsprings were practically the only product Leggett & Platt offered until 1933. However, in that year the company began to manufacture springs for innerspring mattresses, which were relatively new products in the industry and growing in popularity. Thereafter, the company slowly began to diversify its products within the bedding industry by producing rollaway beds and folding metal cots, along with bed frames and bed rails.

In 1960, Harry M. Cornell Jr., J.P. Leggett’s grandson, was elected President and CEO of the company, taking over for his father (who was Mr. Leggett’s son-in-law). The company’s total sales in 1960 were approximately $7 million from three states – Kentucky, Texas and Missouri. Determining the course and future of the company became management’s primary objective. Following an extensive evaluation of the company and its potential, Mr. Cornell and his management partners concluded that Leggett & Platt’s best opportunities for profitable growth lay in a strategy of specializing in manufacturing, marketing, and distributing a broad and growing line of components and related products, first nationally and eventually on a world-wide basis. Key drivers of future sales and earnings would include aggressive internal growth initiatives, coupled with an active and ongoing acquisition program.

Even greater success followed, and Leggett & Platt became known as “the components people.” Leggett & Platt stock was first traded over the counter in 1967. Twelve years later, on June 25th, 1979, top management was present in New York City to witness the stock’s first day listed on the New York Stock Exchange. In 1985, Leggett & Platt grew into the Fortune 500 list of the largest U.S.-based manufacturing companies. In 1999, the company became part of the S&P 500 Index.

Today, Leggett & Platt products can be found nearly everywhere. Its operations encompass over 250 manufacturing plants, distribution centers and other facilities in more than 20 countries. Employee-partners working in the various locations include 24,000 individuals – the people of Leggett & Platt are the company’s greatest asset.

Timeline of Significant Events

* 1883: Joseph P. Leggett develops and patents the first successful spiral steel coil bedspring, then forms a business partnership with Cornelius B. Platt, a blacksmith who operates the C.D. Platt Plow Works plant in Carthage, Missouri.
* 1885: Leggett receives a patent for improvements on the coiled bedspring. J.P. Leggett and C.B. Platt begin manufacturing coiled bedsprings at the Platt Plow Works plant.
* 1895: The first factory and offices are built in Carthage, MO. The workforce consists of the 2 partners and 5 employees. Harry Platt, a brother of C.B. Platt, opens a franchise factory in Louisville, Kentucky.
* 1901: The partnership of J.P. Leggett and C.B. Platt is incorporated under the name “Leggett & Platt Spring Bed & Manufacturing Company.”
* 1933: Leggett & Platt begins to manufacture innerspring units at its Carthage plant.
* 1942: Leggett & Platt survives World War II by working on defense contracts.
* 1960: Harry M. Cornell, Jr., (grandson of J.P. Leggett) becomes president and CEO; he begins implementing a new corporate strategy to broaden the line of component products for the bedding and furniture industries, expand geographically, and offer compatible products directly to furniture stores.
* 1967: Leggett & Platt’s IPO (initial public offering) of 50,000 shares of stock (at $10 per share) and $1 million of convertible subordinated debentures, occurs; the stock is listed over the counter.
* 1971: Leggett & Platt stock is listed on the NASDAQ, and the company achieves more than $1 million in net earnings.
* 1976: Leggett & Platt exceeds the $100 million sales mark for the first time.
* 1977: Construction begins on a new corporate headquarters outside Carthage.
* 1979: Leggett & Platt is listed on the NYSE (New York Stock Exchange), stock symbol "LEG"
* 1983: Leggett celebrates 100 years of operation.
* 1985: Leggett is first added to the Fortune 500 list of largest U.S. manufacturing companies.
* 1990: Revenues exceed $1 billion for the first time.
* 1998: Leggett & Platt becomes part of the Fortune 500 list of largest U.S. companies, across all industries.
* 1999: Leggett is included in the S&P 500.
* 2004: Revenues exceed $5 billion.

Segments

Residential Furnishings

The Residential Furnishings segment began with an 1885 patent of the steel coil bedspring. Leggett & Platt had invented the bedspring with which it launched the U.S. bedspring industry, and as the industry leader, it has continued to "reinvent" its bedspring to great commercial success. Leggett has since been a driving force for continued bedspring development and industry growth. Today, Leggett supplies a variety of components used by bedding and upholstered furniture manufacturers in the assembly of their finished products. For example, Leggett will often supply a bedding manufacturer with most components of a mattress and foundation. Leggett also provides a wide array of components for manufacturers of upholstered recliner chairs, sofas and loveseats.

Major Product Groups

* Bedding components
* Furniture components
* Adjustable beds
* Ornamental beds
* Fabrics
* Carpet cushion
* Geo components

Commercial Fixturing & Components

The Commercial Fixturing & Components segment encompasses three areas. Leggett is the market leader in the design and production of store fixtures, point-of-purchase displays, and storage products used by retailers. In addition, Leggett is the leading independent producer of chair controls, bases and other components for office furniture manufacturers. Leggett also produces injection molded plastic components used in a wide variety of end products.

Major Product Groups

* Shelving, racks, and display cases
* Point-of-purchase displays
* Chair controls and bases
* Plastic components

Industrial Materials

Leggett & Platt is North America’s leading supplier of drawn steel wire and a major producer of welded steel tubing. About half of the wire it produces and roughly one-quarter of its tubing is used by other Leggett businesses. Other customers include bedding and furniture makers, mechanical spring producers, and automotive seat manufacturers. Leggett's businesses also produce specialty wire products (things like cotton bale ties, and boxed and shaped wire); equipment used for baling agricultural products and recyclable waste; coated wire dishwasher racks and coated wire products for other industries; and wire retail fixtures and point-of-purchase displays. Leggett also cuts, forms, and bends steel tubing used for automotive seat frames and other components.

Major Product Groups

* Steel wire
* Specialty wire products
* Coated wire products
* Wire retail fixtures and point-of-purchase displays
* Welded steel tubing

Specialized Products

This segment consists of three groups that design and produce:

* Lumbar systems and wire seating components sold primarily to automotive seating manufacturers
* Van interiors (racks, shelving and cabinets installed in service vans) and truck bodies (for cargo vans, flatbed trucks, service trucks, and dump trucks) used in light-to-medium duty commercial trucks, and sold primarily to truck manufacturers and dealers, fleet owners(typically utility, telecom, and other service and delivery companies), and other commercial end-users
* Wire forming equipment, industrial quilting and sewing machinery, and other automation equipment, both for our own use and for external customers (primarily bedding manufacturers)

Major Product Groups

* Lumbar systems and other automotive seating components
* Service van interiors and truck bodies
* Wire forming, quilting, and automation machinery

SWOT Analysis

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